Corporate VC fund ADIF invests US$2.9mil in 6 startups

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By Lum Ka Kay | Dec 09, 2015

Wants to create ‘regional champs,’ aims to invest in 6 more startups in 2016

Mavcap trying to get two more companies on board the fund

LAUNCHED slightly over a year ago, the Axiata Digital Innovation Fund (ADIF) – a collaboration between Axiata Group Bhd and Malaysia Venture Capital Management Bhd (Mavcap) – announced its first batch of investments.

ADIF is pumping a collective US$2.9 million (RM12.5 million) into six Malaysian technology startups, but declined to give a breakdown. Axiata is the Kuala Lumpur-based regional telco group, while Mavcap is the Malaysian Government’s venture capital arm.

The announcement came just a day after Cradle Seed Ventures, the venture capital arm and wholly-owned unit of Ministry of Finance agency Cradle Fund, announced its first investment, a coinvestment with 500 Startups into Malaysian e-commerce marketing startup Involve Asia.

Meanwhile, ADIF said its funding would allow the six startups to expand their business and products into the regional market.

Axiata group chief corporate officer Mohamad Idham Nawawi said he is excited to kick off ADIF’s investments with these six “highly capable and innovative companies.”

“Our aim is to further develop these locally successful Malaysian companies and help them evolve into regional champions within the digital service space,” he said at the official announcement in Kuala Lumpur on Dec 8.

Idham said he hopes that by 2020, ADIF could help to build up at least five “regional champions,” citing online recruitment powerhouse JobStreet.com as an example of such a champion.

“Axiata is in the best position to enable these startups to grow faster and bigger by providing not only funding, but also industry expertise and market access to our 260 million customers across the region.

“In essence, this really ties back to Axiata’s broader purpose of ‘Advancing Asia’ through connectivity, technology and talent,” he declared.

Meanwhile, Mavcap chief executive officer Jamaludin Bujang (pic) told the media that his agency was in talks with at least two other corporate entities to invest in ADIF.

“We want to do more investments in promising Malaysian startups, so we hope there will be more corporate participation in this,” he said.

Jamaludin described the RM12.5-million investment in these six companies as a “moving figure.”

“It is not a one-off investment. We may invest more into the companies depending on their performance over the next 12 to 18 months,” he said.

With six investments under its belt, Jamaludin said he was looking at ADIF possibly investing in another six startups in 2016.

He said that the collective stake size held by Axiata and Mavcap in the six companies ranged from 20% to 40%.

ADIF fund is managed by Intres Capital Partners, a subsidiary of Mavcap, with Teak Capital and QuestMark Capital Management as partners as well.